Toronto Estate Law Blog : Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

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Mediation is a common occurrence in estate litigation. Mediation is also popular in other areas, including family law and even commercial litigation. When choosing a mediator, I look for the following characteristics:

• Knowledgeable (has to know the law)
• Experienced at mediating (too many “wannabes”)
• Litigation savvy (knows the true costs and challenges of litigation)
• Empathetic (a good, sympathetic listener is a must)
• Diligent (a mediator has to know the issues and subtleties)
• Firm (a mediator has to know when to read the “riot act”)
• Stamina (mediation is often a marathon)
• Adaptable (a mediator wears many hats)

If the other side suggests a mediator you’ve never heard of, ask around. What do your colleagues think and what is the mediator’s reputation like? To be honest, I’m never too quick to agree to a mediator suggested by opposing counsel if I don’t really know their style and reputation. Opposing counsel may have a comfort level with the mediator or know something you don’t that could work against your client. 

By keeping the above characteristics in mind and doing your homework, you and your client will likely have a better chance of satisfactorily settling the dispute.

Thanks for reading, Justin

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Each year the Ontario Bar Association (OBA), Trusts and Estates Section, considers candidates for its Award of Excellence. Last year, the Section paid tribute to Brian Schnurr as the recipient.

The Award for Excellence was created to recognize exceptional contributions and achievements by members of the OBA to the area of trusts and estates.

Any Trusts and Estates Section member of the OBA in good standing, as well as former members of the section who have retired or been appointed to the bench, but not including current officers of the Executive of the Trusts and Estates Section or the Executive of the OBA, are eligible to be nominated.

The criteria for the award is demonstrated leadership in the trusts and estates bar through knowledge, experience, skill, commitment, passion and strength of character, plus all or some of the following:

• academic excellence through teaching at the Bar Admission Course, lecturing at a law school,    participating in Continuing Legal Education and/or academic writing;

• participation in the OBA Trusts and Estates Section Executive or the Law Society of Upper Canada on wills, trusts and estate matters; and

• contribution to the development of wills, trusts and estate law.

Any member of the Trusts and Estates Section of the OBA in good standing is eligible to nominate a candidate by submission in writing, together with a curriculum vitae outlining the nominee's qualifications. The nominator must indicate that the candidate has been advised of the nomination prior to the nomination deadline and has consented thereto. The Award is typically presented at the Section’s Annual Awards dinner in late Spring.

Nominations must be filed by 4:00 p.m. on Friday, January 25, 2007 to:

Peter Guennel, Sections Coordinator
Ontario Bar Association,
20 Toronto Street,
Suite 300,
Toronto, Ontario
M5C 2B8
Fax: 416-869-1390

For more information, and/or to obtain a Nomination Form, please contact Peter Guennel at (416) 869-1047, ext 340, or email at pguennel@oba.org or by visiting on line at http://www.oba.org/en/admin/awards_en/tru_award.aspx.

Thanks for reading.

Craig

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I hope everyone had a great holiday.

With the close of 2007, we turn and look to the promise of 2008. In looking ahead to 2008
many may wonder if they have properly protected and provided for those they intend to protect should something unexpected happen to them. Questions may also arise regarding whether a spouse or parent has taken steps to provide for themselves and/or those they intend to provide for.

While there are no doubt many things to consider for the new year from a family perspective, perhaps this is the year to resolve to consider, or reconsider, whether your family’s legal affairs have been properly planned.

I wish everyone a healthy, happy and prosperous 2008.

Craig

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Interest is normally paid on the proceeds of a policy of life insurance thirty days after the insurer receives sufficient evidence of the claim. The requirements are mandated by statute. What happens, however, where the insured “disappears”, and the beneficiary brings an application for a declaration of death? Is interest payable from the date of death (as declared by the court), or from the date of the declaration itself?

This issue was considered by the Court of Appeal of Manitoba in Antonation v. Sylvester, 2007 MBCA 110 (CanLII). There, the “deceased” disappeared on May 29, 1998. In May 2005, the beneficiary under a policy of insurance on the deceased’s life brought an application for a declaration that the deceased was presumed dead because of the passage of seven years from his disappearance. The court granted an Order on July 4, 2005 declaring that the deceased “shall be presumed to have died on May 29, 1998.”

The proceeds of the insurance policy were paid to the beneficiary within 30 days of the date that the court made the declaration: July 4, 2005. However, the beneficiary claimed interest from the date of disappearance (ie. the date of death as declared by the court: May 29, 1998).

The Court below and the Court of Appeal both held that no interest was payable until 30 days after the date upon which the declaration of death was made. This declaration was part of the “sufficient evidence” that the insurer required in order to trigger the obligation to pay under the applicable legislation. Until this declaration was made by the court, there was no obligation on the part of the insurer to make the payment.

The legislation in Ontario is essentially similar to the applicable Manitoba legislation considered by the court. In fact, the Court of Appeal of Manitoba relied on an Ontario Divisional Court case directly on point.

Thank you for reading.

Paul Trudelle

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Consider the following interpretation issue, which was recently considered by the Ontario Superior Court of Justice:

The deceased left a will kit-type will directing that all “just debts, funeral and testamentary expenses, all succession duties, inheritance and death taxes, and all expenses necessarily incidental thereto, to be paid and satisfied by” my executor as soon as convenient after her death. 

The will went on to provide that the following distributions were to be made:

To son A, Property A "with all loans, leins [sic], mortgages attached”.

To son B, Property B, “free and clear of all debt". 

The residue was to be divided between A and B. For the purposes of the trial, the only assets of significance were the real estate: Properties A and B.

At the time of her death, the deceased had no debt other than certain mortgages registered on title against Property A.

The issue in dispute was what assets were to be chargeable for paying the deceased's taxes, including estate administration tax and income taxes, and funeral and testamentary expenses.

A took the position that these expenses were paid out of the residue, and in the absence of any residue, were to be chargeable equally as against Property A and B. (Properties A and B were of equal value.)

B took the position that Property B was conveyed to him "free and clear of all debt", and thus, those expenses were payable out of Property A only.

What did the court do? Tune in tomorrow.

Until then, thank you for reading.

Paul Trudelle

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Today’s blog is the last in my series addressing preparation for trial in a contested passing. The items discussed this week were certainly not meant to be, nor were they, exhaustive. Preparation necessary for a trial with narrow issues, few documents, few evidentiary concerns and an uncomplicated Estate will obviously be different than a case with numerous issues, voluminous documents, evidentiary issues and a complicated administration. The critical aspect of trial preparation is that it begins at the beginning of a case; not literally, but certainly in the sense of being mindful at pre-trial stages of the evidentiary considerations and how the evidence is to be marshalled and presented.

Aside from ensuring that you have appropriate resource materials at the trial (such as texts dealing with the rules of evidence, the Rules of Civil Procedure, Probate Practice etc.), it is important to have prepared your opening and closing statements (to the extent possible), have prepared the necessary law regarding the substantive issues in dispute (casebook, factum), have addressed costs submissions (organizing offers to settle, preparing a Bill of Costs etc.), and have a trial binder with you at trial for your own use.

A trial binder usually contains the pertinent materials that you would like to have at your fingertips during the trial (ie. pleadings, orders, witness lists, witness summaries, answers to undertakings, listing of the types of evidence objections, offers to settle etc.). The trial binder will allow you to have quick access to information that you might only have a few minutes or less to locate and quickly review.

While most contested passings settle at a pre-trial stage, if a trial is necessary, it might well be won because one party was more prepared than the other.

Thanks for reading this week. Have a great weekend.

Craig

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Today’s blog, which is part of my series this week addressing preparation for trial in a contested passing, deals with several issues regarding evidence at trial.

Rule 52.04 of the Rules of Civil Procedure deals with the marking and numbering of exhibits at trial. Where appropriate and practical, a joint book of documents simplifies the use of documents and the marking of exhibits during the trial. With a joint book of documents, the Judge, the Registrar, each counsel and the witnesses only need to refer to one set of documents, rather than to multiple sets of documents. Depending on issues of admissibility, exhibits can be dealt with by marking each volume as an exhibit or each specific document, within a volume, as it is dealt with.

With respect to witnesses, amongst other things, the following may be done:
(i) make a witness list of anticipated witnesses for each of the parties;
(ii) prepare a chart of the issues/documents to be proved by each witness;
(iii) identify and consider the concerns, evidentiary or not, with the evidence and documents to be dealt with by each witness (some concerns might include whether the Rule in Browne v. Dunn is an issue, are there hearsay evidence concerns, do originals of the documents need to be proved, is a document admissible, what Notices are required under the Ontario Evidence Act, is a witness a hostile witness, and s.13 of the Evidence Act);
(iv) ensure summaries of the evidence of witnesses are obtained and provided if the provision of summaries has been agreed to, or ordered at the pre-trial conference;
(v) prepare all witnesses you are calling and provide the witnesses with copies of the documents applicable to them, where practical;
(vi) prepare for the examinations in-chief and cross-examinations and the documents to be referred to prior to preparing your witnesses;
(vii) if the witnesses are experts, ensure Rule 53 of the Rules of Civil Procedure is complied and be mindful of Rule 31.06 regarding the scope of examination on discovery of the findings, opinions and conclusions of one’s experts;
(viii) prepare and serve Summons to Witness (Rule 53.04); and
(ix) consider whether an Order excluding witnesses is necessary (Rule 52.06).

Consider anticipated objections to evidence to be adduced by opposing parties and prepare submissions and applicable law, as necessary, prior to the trial.

In addition, while demonstrative evidence is a common feature of jury trials, thought should be given as to whether there are tools such as a family tree diagram and/or a chronology of events that can be prepared to assist the Judge at trial.

Thanks for reading.

Craig

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Today’s blog is a continuation of my blogs this week addressing preparation for trial in a contested passing.

It is important in preparing for trial to prepare summaries of the transcripts of the examinations conducted to assist counsel with locating evidence in the transcripts during trial, including admissions and/or inconsistent statements made by a witness at trial. Having said that counsel should personally review the transcripts as part of trial preparation. By reviewing the transcripts, counsel can address issues involving: (i) the completeness and answers to undertakings/refusals, (ii) admissions made by the respective parties, (iii) incomplete answers provided by the respective parties to questions on the examinations, and (iv) whether additional discovery is needed before trial.

Ensure all of your client’s undertakings have been answered. Opposing counsel may not be pressing for the answers to your client’s undertakings, but the answers should be obtained so that (i) you are not surprised by the answer of your client to an unanswered undertaking at trial, (ii) delay cannot be alleged as against your client at a pre-trial stage should the issue arise, (iii) no adverse inferences can be drawn at trial as to why your client has not provided an answer, and (iv) a request for further discovery on the answers will not be entertained just prior to trial, or perhaps even as an issue during the trial. Ensure all of the opposing party’s undertakings have been answered and any follow up discovery has been conducted. If a damages brief is to be provided by the opposing party as a result of an undertaking at examinations or otherwise, ensure that it has been provided.

A party may also, further to Rule 51.02 of the Rules of Civil Procedure, at any time, by serving a Request to Admit, request any other party to admit, for the purposes of the proceeding only, the truth of a fact or the authenticity of a document. A copy of any document mentioned in the Request to Admit shall, where practicable be served with the request (unless a copy is already in the possession of the other party).

The opposing party must respond to the Request to Admit within 20 days, failing which the opposing party will be deemed to admit the truth of the facts asserted in the Request to Admit or the authenticity of the documents referred to in the Request to Admit. As such, the Request to Admit should be served at least 20 days before the commencement of the trial, and quite some time before that, if possible, so that counsel will know what facts need not be proved or the authenticity of documents that will not need to be proved.

There may be cost consequences if a party refuses to admit the truth of a fact or authenticate documents which are proven or authenticated during the trial.

Requests to Admit may be effective to: (i) reduce the facts in dispute, (ii) reduce the number of witnesses to be called and/or the examination of a witness, (iii) minimize the costs and length of the trial, and (iv) avoid having to authenticate documents.

Thanks for reading.

Craig

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While contentious passings of accounts are regularly resolved at a pre-trial stage such as mediation, and without the necessity for a hearing, in certain circumstances a contested passing of accounts may only be resolved by way of a trial. In many cases, a successful result at trial is the direct result of the trial preparation.

It is perhaps trite to say, but trial preparation does not begin between the pre-trial conference and the commencement of trial; rather, it begins with the formulation of a strategy for the case, the identification of the issues in dispute, the determination of the evidence required to prove the case and the marshalling of that evidence. As such, while the ultimate strategy for a trial cannot be finalized until the pre-trial stages of the passing have been completed, and counsel have the benefit of a thorough review of the case (before the pre-trial conference), parties ought to be mindful of the matters to be dealt with at trial throughout the litigation and how such matters can be dealt with or addressed during the pre-trial stages, including through documentary disclosure, examinations and by way of orders of the Court (such as an Order Giving Directions or otherwise).

Having said that, my blogs this week will include a series that considers preparation for a trial of a contested passing.

Have a great day.

Craig

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Last week, I presented a paper at the 10th Annual Estates and Trusts Summit on Dependant Support Claims. Afterwards, my colleague, Jordan Atin, brought an interesting case to my attention regarding the definition of "dependant" under Part V of the Succession Law Reform Act ("SLRA").

In Re Cooper *, the trial judge held that the applicant, Mrs. Hampton, had failed to fit herself within the definition of a "dependant" as defined in the Act. Mrs. Hampton appealed to the Divisional Court, which ultimately allowed the appeal.

Mr. Cooper died intestate such that his insurance and pension monies would go to Mrs. Cooper (his first wife) and the Cooper children would inherit the balance of the estate.

Mrs. Hampton and Mr. Cooper had been living together in a common-law relationship for over 7 years right up until Mr. Cooper's death. The evidence made it clear that Mr. Cooper and Mrs. Hampton acted like a normal married couple.

The most interesting aspect of the case to me is that the Divisional Court held that the issue of support was not contingent on one person making a greater financial contribution than another. In sharing common expenses, a couple, married or not, were supporting each other.

According to the Divisional Court, Mrs. Hampton was a dependant of the deceased within the meaning of the SLRA. Mr. Cooper was also providing support, or was under a legal obligation to provide support, immediately before his death. The court determined that the obligation to provide support to the other spouse remained as long as the relationship of the two parties as spouses continued notwithstanding that Mrs. Hampton was not receiving actual support from Mr. Cooper before his death and regardless of whether Mrs. Hampton could have successfully made a claim for support while Mr. Cooper was alive.

Re Cooper stands for the proposition that a spouse (married, common-law, or same sex) automatically qualifies as a dependant. The issue then becomes whether the spouse is entitled to a dependant support order in the circumstances.

Thanks for reading.

Justin
* Link not available - see 7 E.T.R. 118, 30 O.R. (2d) 113

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In the October 22, 2007 edition of the "Law Times", Bev Cline writes about the importance of family dynamics when considering an estate plan, and when dealing with estate disputes. 

The article quotes Hull and Hull's own Jordan Atin: "A will is usually the last thing that a parent says to his or her children...". As such, the document "creates a definitive, lasting record of the relationship between parent and child and among a child and his or her siblings. That reason alone explains why estate disputes are so hotly contested".

Jordan Atin states that in addition to addressing the mechanics of the estate plan, solicitors also need to address their client’s family dynamics. Lawyers should consider with their clients the emotional effects of the will may that arise after the testator passes away. 

In the article, Sender Tator, a solicitor with Schnurr Kirsh Stephens, notes that in the context of litigation, “emotion often gets in the way of legal or practical realities; your client is often looking for a certain result, which legally may not be feasible".

The interplay of family dynamics and human emotion is one factor that makes estate litigation so interesting. (It is also a factor that often makes the practice so frustrating!)

One of the functions of a solicitor in estate litigation is to consider the role of family dynamics, and to see that it is identified and addressed. In addition, the solicitor should strive to ensure that the legal or practical realities are not overlooked, and that passion alone does not drive the litigation.

Thanks for reading, and happy Halloween.

Paul Trudelle

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With the end of the week comes my final blog in my series this week on considerations to take into account when changing trustees.

Negotiated structures dealing with the retirement, removal and replacement of a trustee may include, or be a combination of, a deed, court order, preparation of accounts, a passing of accounts application, a release, indemnification, Judgment on the passing and Minutes of Settlement (Agreement) dealing with the resolution of the disputes arising therefrom.

A situation where a trustee wishes to retire and the administration of the trust has been simple, straightforward and has been substantially completed by the trustees to the satisfaction of all beneficiaries, who are sui juris, and there are no outstanding liabilities of the trust, will be completely different than one where beneficiaries are seeking to remove and replace a trustee for misconduct and/or in the context of a very complex administration.
The structure of the former situation might be a deed with an appropriate release (if an accounting by the trustees has been provided to the beneficiaries who, with the benefit of counsel, all consent and approve of same in writing, and the trustee’s compensation has been agreed to and taken).

The structure of the latter might include an Application to the Court to remove and replace the trustee on notice to all co-trustees and those with a financial interest. As part of the Application, an order would most likely be sought requiring that the outgoing trustee pass his accounts within a certain time period of the date of the order.

An order removing the trustee should address, amongst other things, the following: (i) the individual(s) being removed and the capacity being removed from; (ii) the appointed substitute trustee or, alternatively, confirmation that the remaining trustees will continue; (iii) the vesting of the trust property in the new trustee and/or the continuing trustees; (iv) that the outgoing trustee shall prepare formal accounts in accordance with the Rules of Civil Procedure and file those accounts and an Application to pass accounts within a certain period of the date of the order as to the date of removal; (v) the manner of compensating the new trustee; (vi) directions required, if necessary, to facilitate any of the above; and (vii) how the costs of the Application are to be dealt with.

In the end, the circumstances of each particular case will dictate which structure is most appropriate and prudent.

Have a nice weekend. Craig

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Today’s blog is the third in my series this week dealing with considerations to take into account when changing trustees.

Whether a trustee or co-trustees have properly administered a trust is obviously a crucial factor in negotiating the removal and replacement of a trustee, and will effect the manner in which a new trustee may be appointed.
In considering a trustee’s potential liability in respect of his or her administration of the trust, the trustees and beneficiaries ought to consider the trustee’s conduct, whether that conduct met the standard of care required, and if not, whether the conduct is exonerated by statute or the terms of the trust.

When a trustee breaches his duty, he may be liable to the beneficiaries for any losses that occur as a result of the breach. When such a breach occurs, the Court, further to s. 35 of the Trustee Act, has the discretion to relieve the trustee of liability in cases where it believes that the trustee acted “honestly and reasonably, and ought fairly to be excused.”

Trustees, outgoing and incoming alike, ought also to carefully review the terms of the trust as the trust may contain provisions that limit the liability of the trustee.

Exculpatory clauses may limit the extent of the trustee’s personal liability to the value of the assets of the trust instrument and/or may protect the trustee by raising the level of culpability required to be found personally liable.

A trustee should be cautious, however, if he or she is relying on an exculpatory clause in a trust to exonerate him or her from liability as such clauses may be held to be invalid, especially where they are broad, or attempt to completely exonerate any and all conduct of the trustee, including liability for acts of gross negligence, intentional wrongdoing, fraud or dishonesty.

The best way, however, for an outgoing trustee (and new trustee) to limit any liability that may be visited upon him or her as a result of the administration of the trust to the date of the retirement, removal and replacement is for the outgoing trustee and his or her co-trustees, if any, to pass their accounts. Assuming the accounts are passed, not only will the new trustee know the “starting numbers” and the assets/liabilities for the future administration of the trust (that is start with a clean slate), but the outgoing trustee will have been afforded the proper protection of the Court order.

Thanks for reading. Craig

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In yesterday’s blog regarding considerations to take into account when considering the change of a trustee of a trust, I noted that today’s blog would deal with who (or what parties) should be involved in that decision.

Whether the trustee is to be removed (and replaced) by way of deed or by way of Court order, any co-trustee and anyone having a financial interest in the trust should be notified of the change and provided with the deed (if the removal can be done by way of deed: see sections 2-6 of the Trustee Act) and any other materials that may be necessary to remove the trustee by way of deed, or served with the application materials if the removal (and replacement) is to proceed by way of Court order. As such, the make-up of these parties should be considered prior to proceeding with the change, as one or more of these parties may, amongst other things, object to or challenge the removal (and replacement) of the trustee, have claims in respect of the administration of the trust and/or dispute the trustee’s compensation.

It may be that a litigation guardian may need to be appointed for a minor(s) and/or for an incapable party. In such a case, the Office of the Children’s Lawyer or the Office of the Public Guardian and Trustee may need to be served with the application materials so that they may have the opportunity to respond or become involved, as appropriate.

Rule 9 of the Rules of Civil Procedure addresses proceedings by or against a trustee while Rule 7 regulates the bringing of proceedings by or against parties under disability. It may also be that a representation order, pursuant to Rule 10, is required as the proceeding impacts on persons who are not before the Court and who cannot be brought into the litigation because they are unborn or unascertained, or because they cannot be readily found or served.

Thanks for reading. Craig

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There are a variety of reasons for the removal and replacement of a trustee, some voluntary on the part of the departing trustee, others involuntary. A trustee might decide to retire or resign from his or her position. On the other hand, a trustee may need to be changed as a result of, amongst other reasons, the trustee’s death, incapacity, bankruptcy, the conduct of the trustee or the relationship of the trustee and the beneficiaries of the trust. Depending on the circumstances, the removal and replacement of the trustee may be done by way of deed or by way of court order.

The transition of the outgoing trustee and of an incoming trustee may be critical to each trustee as well as the beneficiaries of the trust, perhaps for very different reasons. The requirement (or not) to apply to Court to change trustee(s), the satisfaction of the administration of the trust to date, the outgoing trustee’s accounts, a passing of accounts, the vesting of the trust’s assets in the new trustee and/or any co-trustees, the trustee’s compensation, who is an appropriate replacement and the provision of releases and the indemnification of the trustees involved are all considerations, amongst others, for those involved.

It is noteworthy to distinguish between the removal and replacement of a trustee and the removal and replacement of a personal representative of a deceased person’s estate because of the different ways that they are treated. A trust instrument may provide for the retirement, removal and/or replacement of a trustee. If there are specific provisions in the trust instrument for the retirement, removal and/or replacement of a trustee they will govern. To the extent the trust instrument does not govern the issue, generally, sections 2 to 8 of the Trustee Act R.S.O., 1990, c. T. 23. (the “Act”) apply to the removal and replacement of trustees, while section 37 of the Act relates to the removal and replacement of personal representatives.

The balance of this week’s blogs will focus on certain considerations to be taken into account when negotiating the retirement, removal and/or replacement of a trustee. More specifically, I will touch on considerations involving the parties who should be involved with the negotiation, liability considerations and structures of the removal and/or replacement.

Thanks for reading.

Craig 

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Today’s blog is a reminder that Hull and Hull LLP has another of its Breakfast Series on October 5, 2007. The Breakfast Series provides members of the bar with presentations on topics of importance to estate practitioners.

At the October 5th meeting, the following presentations will be made: “Settlements When Dealing with Minors and Incapable Beneficiaries” by Ian M. Hull, “Secret Trusts and Powers of Appointment” by David M. Smith and “Mutual Wills – A Review” by Paul E. Trudelle.

The meeting is being held at the Ontario Bar Association, 2nd Floor, 20 Toronto Street, Salon 2 & 3, Toronto, Ontario. Breakfast begins at 8:15 a.m. with the Presentations starting at 8:30 a.m. A fee of $30.00 ($28.30 + $1.70 GST) is payable to Hull & Hull LLP upon registration by cheque, VISA or MasterCard. Materials are included. As with the two other Breakfast Series meetings that were offered earlier in 2007, this seminar will be offered via Webcast.

A CD or Cassette Tape recording of the Breakfast Seminar will be available at a fee of $20.00 ($18.96 + $1.14 GST)

To register, please contact Diane Labao at (416) 369-1140 (press 0) or by email to dlabao@hullandhull.com.

See you there.

Craig

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A forgotten cousin of litigation is the enforcement of judgments and orders (including cost orders). Here’s a general overview.

To enforce the payment or recovery of money, a party has the following options: a writ of seizure and sale, garnishment, a writ of sequestration, appointing a receiver (Rule 60.02/Forms 60A and 60B).

A party can enforce an order for the recovery or possession of land by a writ of possession (Rule 60.03/Form 60C).

An order for the recovery of possession of personal property, other than money, may be enforced by a writ of delivery (Form 60D).

An order requiring a person to do an act, other than the payment of money, or to abstain from doing an act, may be enforced against the person refusing or neglecting to obey the order by a contempt order (Rule 60.05). A motion before a judge is required (Rule 60.11).
I recently issued a writ of seizure and sale in respect of land. As with all of the enforcement provisions referred to above, a writ of seizure and sale in respect of land has its own unique sub-rules (counsel should read the applicable sub-rules carefully). For example, once a writ of seizure and sale of land has been issued by the local registrar, a creditor may not take any step to sell land under the writ until four months after the writ was filed with the sheriff (Rule 60.07(17)). No sale of land may be held until six months after the writ was filed with the sheriff (Rule 60.07(18)). The sale of land cannot be held under a writ of seizure and sale unless notice of the time and place of sale has been mailed to the creditor and to the debtor at least 30 days before the sale (Rule 60.07(19)).

Before a creditor decides how best to enforce a monetary judgment or order, a creditor can chose to examine a debtor. Rule 60.18 states that a creditor may examine the debtor in relation to: the reason for non-payment of the order; the debtor’s income and property; debts owed to and by the debtor; whether the debtor has disposed of any property either before or after the order; and the debtor’s present, past and future means to satisfy the order.

Rule 60.19 deals with the cost of enforcement generally. Finally, it is important to note that, pursuant to Rule 60.12, where a party fails to comply with an interlocutory order, the court may stay the party’s proceeding, dismiss the party’s proceeding or strike the party’s defence, or make such order as is just.

Thanks for reading. Enjoy the weekend.

Justin

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Listen to "Securing Interest in Land in Litigation"
Read the transcribed version of "Securing Interest in Land in Litigation"

In this week's episode of Hull on Estates, Sean Graham and Natalia Angelini discuss securing interest in land in litigation.

Click "Continue Reading" to read the transcribed version of this podcast.

Securing Interest in Land in Litigation - Hull on Estates Podcast #75

Posted on September 4^th, 2007 by Hull & Hull LLP

Sean Graham: Hi, you’re listening to Hull on Estates, podcast #75, on Tuesday, September 4^th, 2007.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.  Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and Wills. Now, here are today’s hosts.

Natalia Angelini: Hi Sean, how are you today?

Sean Graham: Oh, pretty good. How are you Natalia?

Natalia Angelini: Very well.

Sean Graham: We thought we’d talk about ways of securing interests in land in litigation. And Natalia, you’ve done a lot of this so maybe you can set the table a little bit for how you might go about doing that.

Natalia Angelini: Sure. Often times in litigation, there’s an interest in land that’s in question that either beneficiaries are disputing over or the ownership is uncertain. And in those kinds of situations, in order to protect your client, and secure the property, one of the things that you can do is get a Certificate of Pending Litigation registered on title to the property.

Sean Graham: And when does this generally come up in your experience? Does it come up at the start of the litigation, or, you know, as an interim step partway through? What’s your experience?

Natalia Angelini: In my experience, it comes up most often at the very beginning of litigation, which is usually better because you can deal with it immediately and secure the property immediately and reduce the risk that it can be transferred or encumbered during the litigation.

Sean Graham: Now would you say that this is one of those sort of drop dead issues where the client comes in to a meeting and there are certain issues that sort of raise our red flags at the outset. Is this one of those?

Natalia Angelini: I think it can be. I think, in my experience, that’s how it’s come about.

Sean Graham: Yeah, I also would say that in those initial meetings, it’s very often the case that the clients are, they have been waiting to see you, they’re pretty ready to go, they want to take steps right away. And the Certificate of Pending Litigation is generally one of those where there’s land involved ‘cause you do not want the clients to leave and let it sit for 3 or 4 weeks and then before you know it, someone’s sold the property and the client is left holding the bag.

Natalia Angelini: Right and it’s something that once clients discuss the issue with us, and raise the issue of land, its certainly, a red flag certainly goes off in my mind and I immediately consider the steps that we could take to deal with that.

Sean Graham: Now…I’m sorry…now in terms of process, how would you get that issue off the ground?

Natalia Angelini: Well when you want to get a Certificate of Pending Litigation, firstly it has to be in your originating application. So you seek that relief in your application together with the other relief that your clients are seeking. And then you bring a separate motion. Typically I bring that separate motion almost immediately because I want to get the CPL issue nailed down and deal only with the CPL in that motion most often. And that motion is brought pursuant to Rule 42 of the Rules of Civil Procedure and Section 103 of the Courts of Justice Act. So those…that statute and that Rule provide part of the grounds for that motion or form them.

Sean Graham: Now I think it’s worth mentioning. You don’t actually need to claim ownership of the land in order to get a Certificate of Pending Litigation. It’s enough to claim an interest in the lands. So you don’t have to say you are the complete owner of that land. And in the estate context, one area that might come up is by saying “I am a beneficiary of this estate, this estate owns or ought to own or has some interest in the land, ergo as a residuary beneficiary, I do as well”. And so, in many cases, there’s more than one beneficiary and so you can’t really claim to be the complete beneficial owner of the piece of land which is going to fall into residue and then be divided. But it is enough to have an interest. And I think that’s a point worth considering.

Natalia Angelini: Right.

Sean Graham: Now, in terms of the Order itself, how long does the Certificate of Pending Litigation last?

Natalia Angelini: A Certificate of Pending Litigation lasts until the Order granting it is set aside, or varied.

Sean Graham: And so, I take it, no one is gonna buy a piece of land where the ownership is in issue by a Certificate of Pending Litigation. So in effect what you do is you freeze title to the land, potentially for years.

Natalia Angelini: Absolutely. Its, depending on the circumstances, it can be quite a draconian measure.

Sean Graham: And that brings me to the sort of downside. Because for every strong measure like this, there’s generally some risk to the client who wants it imposed. And maybe we could touch on that for a minute.

Natalia Angelini: The downside, the potential downside, Sean, is that your client can be liable for damages that may result from the CPL being registered. For instance, where the property is restricted from being sold when there is, you know, a buyer available and an offer made and ultimately at the end of the litigation, it turns out that there’s a finding that the CPL should never have been registered. So even though, in this case, clients don’t have to give undertakings as to damages, like they do in injunction cases, that risk is still there. And, you know, you’ve got to advise your client and your client should be aware of that risk and I think you’ve got to assess, you know, the strength of their case and the extent of their interest in the property.

Sean Graham: So you have to be pretty sure, it seems to me.  With the fact that there’s no explicit undertaking, I gather would probably not carry too much weight with the Court if a $2,000,000 deal was lost and the value of the land plummeted and then it was found out that the beneficiary ought not to have meddled in the title. All of a sudden you’re on the hook for the difference, plus the costs of the other side, plus your own costs. That could be quite a devastating result, so…

Natalia Angelini: Right…

Sean Graham: …not surprising, I guess, that with the heavy hammer comes a pretty significant risk as well. So, given those risks, I think that it’s worth mentioning that a Certificate of Pending Litigation is kind of at one end of the spectrum. It gives you a great deal of protection but there’s corresponding risk. And maybe there’s other, maybe not so strong remedies, but other remedies that you can come up with in dealing with land and could you mention some of those?

Natalia Angelini: Sure. There certainly are. And that can range from obtaining a Court Order. I think this would happen later on in the litigation, where you’ve presented your full case to the Court and you get an Order from the judge saying, or essentially disallowing the opposing side to sell the property, rather restricting them from doing that. Something that is commonly done is placing a Caution on the property. And it’s not too difficult to get a Caution registered. Your interest does have to be set out on the Caution. I know that in several cases, people try to slap Cautions on without a real legitimate claim to the land. And, you know, the Registrar will ultimately remove the Caution. But if you do have a legitimate interest and the Registrar is satisfied, that Caution will stay on and it has a lifespan of 60 days. However, in practice, what I understand is that unless someone attempts to do something with the land, that Caution can still stay on after those 60 days. It’s not automatically removed.

Sean Graham: Now I take it that the risk with the CPL, the Certificate of Pending Litigation, is that what you do to the land or what you ask the Court to do to the land could reduce the value or the value decreases over time and an opportunity to sell is lost. You would think that maybe the same things may happen with an Order and a Caution. So I just want to be clear, I don’t think we’re completely off the hook on this by getting an Order or a Caution as opposed to a Certificate of Pending Litigation.

Natalia Angelini: We’re not, but at least in respect of the Caution, I mean, it really is a much more temporary measure. And I think it can provide your client with interim security since the property cannot be sold without the consent of the Cautioner. So it can give you that interim security but it isn’t so definite that it can really sort of hinder or scuttle a sale. There is one more way to address this scenario and it’s certainly risk-free for your client and it is getting the other side to agree to sign an undertaking not to sell or encumber or in any way deal with the property. And I’ve done that before but I think it’s restricted to the scenario where you’ve got an opposing side that’s trustworthy and, you know, whose undertaking would satisfy your client.

Sean Graham: Yeah, and I find a lot of times that comes down to sometimes even the lawyer on the other side, but certainly the client. If you have a trust company, you’re pretty safe with that undertaking. Or if you have sort of a client on the other side that you know has substantial assets, those types of considerations certainly come into it. And then you can get pretty much the full benefit of a Certificate of Pending Litigation, at least from a practical point of view, without some of the downside risks. Because if the other side either undertakes or consents to an Order not to sell the land, I do think it’s much less likely, although not impossible, it’s much less likely that the Court is going to impose a costs Order on you at the end of the day.

Natalia Angelini: Right, and in going the consent Order route, sorry, or the undertaking route, it’s a lot less costly.

Sean Graham: For sure, and you don’t have to dispute it. I mean, I’ve had certainly injunction motions where the litigation fees quickly get into the tens of thousands of dollars and it’s not a guaranteed remedy. It’s quite a risky step and very often clients who are gangbusters to get going, when they hear about it, you know, may back off and they may have some sober second thoughts when they find out what some of the consequences of bringing that remedy and losing, or even the cost consequences, the expenses of bringing the remedy and winning. So often after you have that chat, some of the alternatives we talked about look better and better.

Natalia Angelini: Umm, I agree Sean, good point.

Sean Graham: Well, I think we’ve covered the very basics of this at least. And hopefully that’s helpful to people. Thanks very much, Natalia.

Natalia Angelini: Thank you.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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We are all too aware of the technology that surrounds us. Blackberries, pagers, cell phones, and fax machines cloak us in a patina of technology. We cannot escape from technology and, in fact, we are now “on” 24/7. It is somewhat ironic, and perhaps tragic, that the promise of technology was to free us from the drudgery of work. However, any professional or businessperson will tell you that technology has only made work life more demanding and deadlines more immediate. There is no escaping the office.

However, heading into the weekend, it is worth considering that there is a rising tide, some might even call it a revolution, that the proletariat (yes, that now includes professional and businesspeople thanks to technology) need to down their tools. In other words, Blackberries need to be turned off, cell phones muted, and faxes left waiting in the in-tray until Monday morning or after a well-deserved holiday. Psychiatrists and psychologists will tell us that leisure and recreation is an important way to recharge our batteries. The truism “all work and no play make Jack [or Jill] a dull boy [or girl]” seems even more relevant today. Perhaps we need to look to our European counterparts, who take longer holidays and seem more willing to stop and smell the espresso.
In my view, a well-rounded and high functioning lawyer should take the time to recharge his/her batteries as well as broaden his/her experience by travelling. A lawyer should also take the time to read the newspaper or the latest magazine, or, in fact, a good book. Living, and not merely working, provides perspective, context, and helps develop judgment – traits that any good lawyer needs. As the calls for technology to be “turned off” or, at least, muted grow, it will be interesting to see how society ultimately responds.

Have a good weekend and relax...

Justin

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I am currently embroiled in several guardianship fights where the grantor’s capacity to grant a power of attorney is very much at issue. I therefore read with interest an article, co-authored by our own Ian Hull, regarding the legal and medical methodology in assessing testamentary capacity and evaluating undue influence. The article was published in the American Journal of Psychiatry in May 2007. 

The article addresses a variety of issues. However, the one that I want to consider today is the common cognitive screening tests used by the medical profession to assess testamentary capacity. 

By way of introduction, the article states:

Clinicians and legal experts must understand that cognitive tests are not diagnostic of dementia and cannot be used as a measure of capacity. Their value lies in the ability to screen for cognitive impairment and to reflect changes in cognition over time. The Mini Mental Examination (MMSE) and the clock-drawing test are the two most common used cognitive screening tests.

The MMSE is widely used and is generally regarded as a test of cognitive function, albeit with limitations. The MMSE canvasses seven cognitive functions with a possible total score of 30. Scores below 26 suggest that a person is impaired. However, there are a variety of outside biases that may affect the MMSE score, including education and language.  The MMSE is therefore not necessarily determinative or diagnostic of incapacity, but simply instructive as to whether the person being assessed is cognitively impaired. It is a test that can be repeated over time with good results.  

The clock-drawing test simply shows a circle. The person being assessed is then instructed to place numbers on the circle so that the circle looks like a clock. The patient is then asked to set the time to ten past eleven. 

It is widely accepted that the clock-drawing test covers a wide range of intellectual and perceptual skills. According to the article, the clock-drawing test measures: comprehension; planning; visual memory and reconstruction of a graphic; motor programming and execution; numerical knowledge; abstract thinking; etc. While no specific score is given, the actual test provide a universal global assessment of cognitive function. For anyone with small children, they will know that telling time on a conventional clock is not necessary an easily acquired skill and takes some degree of cognitive proficiency on the part of a child. The value of the clock-drawing test in assessing cognitive function therefore becomes apparent when dealing with adults. 

Justin

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In the context of estate litigation, mediation, as well as pre-trial conferences, often lead to settlements. The importance of carefully documenting a settlement should not be overlooked. Where required, a Rule 7 motion (court approval of a settlement where a party is under a disability) will have the effect of forcing the parties to document their settlement by way of a supporting affidavit, proposed minutes of settlement, and/or a draft order. As a result, the parties know exactly where they stand and what they can expect in the future.  While a successful pre-trial conference may result in a court order on the spot, such an order, if granted, usually indicates that the parties have simply settled without canvassing the terms.

Too often a settlement is not properly documented and subsequent problems inevitably arise. It has been my experience that parties attending mediation or a pre-trial conference are anxious to leave. They may be emotionally exhausted both from the day and from the litigation generally and suffering from financial fatigue. In fact, the parties may have a hard time just being in the same room. Counsel too becomes frustrated by a long and arduous day and when a settlement is finally reached are anxious to leave. Counsel mistakenly believe that the matter can be “written up” at a later time. 

In my view, failing to sign rudimentary minutes of settlement, or an outline of settlement, with comprehensive minutes to follow is a mistake. Predictably later disagreements arise as to the exact terms that were agreed to. It is my experience that drafting minutes of settlement, even rudimentary ones, inevitably raise issues that the parties did not initially contemplate or think to address.  It is therefore worth taking the time to draft minutes of settlement, or an outline of key terms, to be signed by all parties at the conclusion of a successful mediation or pre-trial conference.  

Once drafted, it is my practice to have the client sign minutes of settlement rather than counsel. This helps ensures that if a client tries to resile from the settlement at a later date, the client’s signature is clearly staring up at them (clients should read the minutes before signing).  

Finally, once a settlement is reached and minutes of settlement signed, the parties should seriously consider bringing a motion to approve the settlement even if such a motion is not technically required. The cost is well worth it. There is nothing like the protection and blessing of a court order to ensure a harmonious future.  

Justin

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It is widely assumed, and accepted for that matter, that a formal passing of accounts affords full protection to an estate trustee. The familiar mantra is that those with a financial interest in an estate are not only required to object to the accounts proffered, but must concurrently raise any other issue regarding the overall competency of the estate trustee (succinctly summed by the phrase “you snooze you lose”). However, I recently came across an Ontario Court of Appeal (“C.A.”) case that challenges that proposition.

By way of background, section 49(2) of the Estates Act states: “The judge, on passing the accounts of an executor… has jurisdiction to enter into and make full inquiry and accounting of … the whole property that the deceased was possessed of… [including] its administration and disbursement”. Section 49(3) authorizes a judge to order the estate trustee to pay damages if the estate trustee occasioned financial loss to the estate through misconduct, neglect, or default. It is worth noting that the language is permissive, not mandatory, seemingly providing a beneficiary with the opportunity to make a later complaint.

In Simone Estate v. Cheifetz, www.canlii.org/en/on/onca/doc/2005/2005canlii36155/2005canlii36155.html,Stephen Cheifetz was a Windsor lawyer who was named as one of three executors of the respective estates of a husband and wife (his clients) who died tragically in a plane crash. Mr. Cheifetz eventually resigned as estate trustee and was ordered to pass his accounts. His compensation was challenged and Mr. Cheifetz was ultimately ordered to repay monies taken as compensation. The successor estate trustee then brought an action against Mr. Cheifetz for damages for breach of fiduciary duty/breach of trust.

Somewhat complicating the matter was the fact that the decision arose out of a rule 20 and rule 21 motion. However, to cut to the chase, the C.A. held that on the earlier passing of accounts the court was concerned with the proper compensation to be paid to Mr. Cheifetz as estate trustee. Conversely, in the action for damages for breach of trust, the court would be concerned with issues of a very different nature. While aspects of Mr. Cheifetz’s conduct considered on the passing of accounts might be considered in the action for damages, it would be for a different purpose and different legal considerations would apply. 

The C.A. went on to point out the undesirability of litigating the issue of breach of fiduciary duty/breach of trust on a passing of accounts (apparently disregarding the fact that a section 49 claim could be carved out as a trial of an issue). In the end, the action for damages stood and Mr. Cheifetz was permitted to litigate issues pertaining to his alleged breach even if such issues had been raised on the passing of accounts.

For a more fulsome discussion of this case, please see this week’s Podcast. Enjoy and keep reading.

Justin

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Today’s blog is the third in a three part series dealing with the availability of Rule 60.11 contempt orders to enforce the payment of money and more specifically, the case of Dickie v. Dickie, in which the Ontario Court of Appeal (C.A.) and Supreme Court of Canada (“S.C.C.”) considered this issue.

Part I (July 31, 2007) noted several C.A. cases on the issue and provided background to the Dickie case. Yesterday’s blog dealt with the C.A.’s decision in Dickie. As promised, today’s blog deals with the S.C.C.’s disposition of the case. As noted yesterday, the C.A., by majority decision, dismissed the appeal in Dickie, finding that the appellant ought not to have been found in contempt by the motion Judge for failing to comply with orders that required him to provide a $150,000 irrevocable letter of credit to secure his child and spousal support obligations and to provide security for costs in the amount of $100,000 as each order was an order for payment of money. Laskin J.A. dissented.

The S.C.C., however, was in substantial agreement with the reasons of Laskin J.A. The S.C.C. therefore allowed the appeal and set aside the order of the C.A. The motion Judge’s order was reinstated.

Laskin J.A. had found that where money is ordered to be paid not to the creditor but into Court, or to its functional equivalent (solicitor to be held in trust), and where the effect of the order is not to create a fixed debt obligation but to secure a debt obligation, then the order is not an order for the payment of money under Rule 60.11.

The S.C.C. was also of the view that the C.A. had the authority to refuse to entertain the appeal for the reasons provided by Laskin J.A. (based on the record showing continuing disobedience with Court orders) until the appellant before the C.A. had taken steps to comply with the Court orders below.

While the decision in Dickie does not change the law that Rule 60.11 contempt orders cannot be used to enforce the payment of money, the decision may well effect, among other things, the nature of the relief sought in support claims brought under the Succession Law Reform Act where there is a potential risk of non-payment of support obligations.

Thanks for reading. Craig

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While I had initially thought this was a two blog series, it has become three blogs. In yesterday’s blog I noted the Ontario Court of Appeal’s (“C.A.”) decisions of Forest v. Lacroix Estate and Murano v. Murano (which affirmed that Rule 60.11 contempt orders cannot be used to enforce orders for payment of money) and I provided the background to the recent case of Dickie v. Dickie, [2007] S.C.J. No. 8, [2006] 78 O.R. (3d)1 (Ont. C.A.). Today’s blog will focus on the C.A.’s decision in Dickie while tomorrow’s blog (Part III) will address the S.C.C’s decision.

Again, the Dickie case involves a dispute between a husband and wife that separated. The husband had been found in contempt for failing to comply with orders to provide a $150,000 irrevocable letter of credit to secure his child and spousal support obligations and to provide security of costs in the amount of $100,000.

As a preliminary matter, the wife submitted to the C.A. that it ought to decline to hear the appeal on the basis that the husband had continued to flaunt not only the orders for security which were the subject matter of the contempt motion, but also the underlying support orders. The C.A., by majority decision, allowed the appeal to proceed. The C.A., again by majority decision, allowed the husband’s appeal and set aside the finding of contempt on the basis that Rule 60.11 cannot be used to enforce either security order because each was an order for payment of money. 

The dissent of the C.A. (Laskin J.A.) is particularly interesting, however.

Laskin J.A. was of the view that the C.A. had a discretion to refuse to entertain the husband’s appeal and that based on the record showing continuing disobedience with Court orders, it should have exercised that discretion. He would have adjourned the husband’s appeal until the husband had taken steps to comply with the Court orders below. However, assuming the Court was correct in entertaining the appeal, Laskin J.A. would have dismissed the appeal finding that neither order for security amounts to an order for payment of money within the meaning of Rule 60.11 and the husband had been afforded procedural fairness. 

Laskin J.A. found that where money is ordered to be paid not to the creditor but into Court, or to its functional equivalent (solicitor to be held in trust), and where the effect of the order is not to create a fixed debt obligation but to secure a debt obligation, then the order is not an order for the payment of money under Rule 60.11.

The S.C.C.’s decision tomorrow. Thanks for reading.

Craig

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In Forest v. Lacroix Estate (2000), 187 D.L.R. (4^th) 280, the Ontario Court of Appeal (“C.A.”) affirmed that Rule 60.11 contempt orders cannot be used to enforce orders for payment of money. 

In Forest, a testator had named his son trustee and sole beneficiary of his estate having no provisions for his common-law wife of 19 years. Despite there being an order specifically prohibiting the dissipation of the estate, the son dissipated a significant amount of the estate assets. The Trial Judge having made a finding of contempt, ordered the son committed to jail for 9 months unless he purged contempt within 28 days by paying the common-law wife. The Court of Appeal noted, following a review of the law, that there are other means by which support orders can be enforced.    

In 2002, the C.A. in Murano v. Murano, [2002] O.J. No. 3632 relied on the reasoning in Forest and held that there was no exception for family law matters. 

In today’s and tomorrow’s blog I will touch upon the case of Dickie v. Dickie, [2007] S.C.J. No. 8, [2006] 78 O.R. (3d)1 (Ont. C.A.), in which the C.A. and Supreme Court of Canada (“S.C.C”) deal with the availability of a contempt motion in respect of the failure of a party to comply with alleged orders requiring the payment of money.

Today’s blog will set out the background to Dickie; tomorrow’s blog will deal with the decisions of the C.A. and the S.C.C.

The case involves a dispute between husband and wife. Before the C.A. was the appeal by the husband from an order finding him in contempt of Court for failing to comply with orders requiring him to secure support obligations by providing an irrevocable letter of credit and to post security for costs. The motion Judge imposed a sentence of 45 days in jail for that contempt, which the husband served immediately. The husband pursued his appeal arguing that the motion’s Judge had no jurisdiction under Rule 60.11 of the Rules of Civil Procedure to make a contempt order because the underlying orders were orders requiring him to make a payment of money.  The wife brought a preliminary motion before the C.A. submitting that the Court should refuse to entertain the appeal because of the husband’s wilful disregard for orders of the Court.

Thanks for reading. Part II tomorrow.

Craig

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In yesterday’s blog, I wrote about the recent case of Conceicao Farms Inc. v. Zeneca Corp., [2007] 83, O.R. (3d) 792, www.canlii.org, decided by the Ontario Court of Appeal. As I noted, this case is a good reminder of the care and focus required during the discovery process when seeking disclosure of findings, opinions and conclusions of another party’s expert.

The Ontario Reports dated July 27, 2007 indicate that an application for leave to appeal to the Supreme Court of Canada (“S.C.C.”), www.scc-csc.gc.ca, for this case was filed on November 17, 2006 and submitted to that Court February 12, 2007. It appears that the S.C.C.’s decision granting or dismissing this Application has yet to be released.

In the normal course a respondent is given the opportunity to respond before the application is submitted to the Court.

Leave may be granted when the S.C.C. finds that the case raises an issue of public importance and ought to be decided by the S.C.C.  The case must then raise an issue that goes beyond the immediate interest of the parties to the case. 

Applications for leave are usually decided by a panel of three judges of the Court.

According to the S.C.C. website, as many as 600 applications for leave are filed each year with the Court granting leave to approximately 70 applications per year, touching upon a variety of legal issues.

As part of the application seeking leave to appeal, a party must, among other things, complete the detailed requirements for such applications further to Rule 25 of the Rules of the Supreme Court of Canada. Aside from a notice of application for leave to appeal and other documents, a memorandum of argument must be filed.  

It will be interesting to see if the appellants in the Conseicao Farms Inc. matter will be able to persuade the panel of S.C.C. judges that the case raises an issue of public importance beyond the immediate interest of the parties.

Thanks for reading.

Craig.

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Listen to "Litigation Involving Minors"

Read the transcribed version of "Litigation Involving Minors"

In Episode 70 of Hull on Estates, Paul and Sean discuss Court approval of settlements affecting the interests of minors. They refer to Rule 7.02 and 7.08 fo Ontario's Rules of Civil Procedure as well as the case of Marcoccia (Litigation Guardian of) v. Gill, 2007 CarswellOnt 15 (Ont.S.C.J.).

Click  "Continue Reading" for the transcribed version of this podcast.

Litigation Involving Minors - Hull on Estates Podcast #70

Posted on July 31^st, 2007 by Hull & Hull LLP

Sean Graham: Good morning. It’s Tuesday, July 31^st, 2007 and you’re listening to Episode 70 of Hull on Estates.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.  Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and Wills. Now, here are today’s hosts.

Paul Trudelle: Hello Sean.

Sean Graham: Morning Paul, how are you?

Paul Trudelle: Very good thanks. 0Today we thought we would talk about the approval of infant settlements in the context of litigation involving minors and what is required in order to settle a case that involves a minor. 

Sean Graham: Yeah, and just to put it in context, it’s an interesting proceeding because often what has happened is that you’ll be dealing with a family, generally in which a minor has been injured, sometimes quite badly.  And they will then have been through a very difficult litigation proceeding against insurance companies.  And once they’ve settled that litigation, they figure thank goodness, the ordeal is over, we can get on with our lives.  However, they need court approval of that settlement.  And the court approval is not a rubber stamp, and so that can cause a lot of dismay.

Paul Trudelle: That’s true.  Nothing is ever easy in litigation.  So with the scenario that you put forward, the car accident involving a minor, the minor is hurt, the minor brings a claim for damages. How is that claim prosecuted on behalf of the minor?

Sean Graham: Well the first step is that a litigation guardian needs to be appointed to protect and prosecute the interests of the minor who cannot do it him or herself. 

Paul Trudelle: Right, and the provision for that is Rule 7.02 of the Rules of Civil Procedure that deals with litigation guardians for plaintiffs.  And the procedure there for appointing a litigation guardian is quite simple and straight forward, I understand.

Sean Graham: Yeah.  You have to present the court with an Affidavit which covers off certain grounds. And the court appointment can be sought.  But the more simple way to go is to file an Affidavit saying that first: you consent to act as litigation guardian; secondly, that you’ve given written authority to a named lawyer to act on your behalf; thirdly, you have to provide evidence concerning the nature and extent of the disability.  And for a child, it might simply be that the person is a minor.  But often the accident will have caused more profound disabilities. You have to, for a minor, you have to simply state the minor’s birth date, whether the minor or person under disability is ordinarily resident in Toronto, setting out the relationship to the person under disability, and with minors, you’re often dealing with a parent, stating that there’s no interest of the litigation guardian opposing the interests of the child.  And finally, acknowledging that you’ve been informed of your liability to pay personally any costs awarded against the litigation guardian or against the minor.

Paul Trudelle: That’s right.  And that’s all from Rule 7.02 which sets out, in effect, a checklist.  If your Affidavit hits all of those points, then that Affidavit gets filed with the court when the claim is commenced.  And you’re off and running as litigation guardian. No formal order is required.

Sean Graham: Exactly.  So it’s a fairly simple proceeding.  And then the defendants can deal with you, knowing that you actually have authority.

Paul Trudelle: So you’re off and running, you’re going through your litigation, the minor is acting, or represented by a litigation guardian. Now, can the litigation guardian enter into a settlement on behalf of the minor?

Sean Graham: Yes, with a pretty huge caveat. You can enter into a settlement, but the settlement cannot be enforced unless you get court approval of the settlement. So for all practical purposes, you’re going to need court approval of that settlement.

Paul Trudelle: So what the parties would normally do in those cases is settle the case, subject to court approval of the settlement on behalf of the minors.  And failing that, the settlement isn’t binding on the minors.  And any defendant wouldn’t settle on that basis without court approval because it’s not binding and it leaves the defendant open to litigation once the minor comes of age. 

Sean Graham: For sure, and the thought is generally that the lawyer advising on the settlement has done a good job, the litigation guardian has done a good a job. And the thought tends to be that no problem, we’ll get that approval, it’s just a rubber stamp motion. That is true in some cases but it’s a dangerous assumption because the courts, I’ve found, are becoming more and more alert to these settlements.  And more and more are serving as sort of an auditor function to make sure, as a last barrier to protect the minor, that the settlement is in fact in minor’s interest.

Paul Trudelle: So what is the procedure for getting the motion to approve the settlement before the court, to get the court to look at the settlement, to consider it and say “yes, this is a valid settlement” or “no it’s not?” And then we’ll talk about what happens if the court rejects the settlement.

Sean Graham: Well you bring a motion under Rule 7.08 of the Ontario Rules of Civil Procedure.  And it’s a motion.  You can bring an application…

Paul Trudelle: I think you bring an application if there has been no action started, so…

Sean Graham: That’s right.

Paul Trudelle: If you’re at…if you were able to negotiate a settlement before any claim is even started, any defendant or any payor in that circumstance, would want court approval. So in that case, you’d start a separate application.  Normally, however, there’s an action already started, so you bring a motion in that action.

Sean Graham: Yeah exactly, thanks Paul. And the materials you have to file in support of your motion or application is an Affidavit of the litigation guardian setting out the material facts and the reasons supporting the settlement and the position of the litigation guardian in respect to the settlement which is, of course, that the litigation guardian agrees with it. You also need, though, and this is kind of an interesting one, you need an Affidavit of the lawyer who acted for the litigation guardian, setting out the lawyer’s position in respect of the settlement. And then you need the minor’s consent in writing if the minor is between the age of sixteen and the age of majority, eighteen, unless the judge orders otherwise. And then finally, of course, you actually need a copy of the Minutes of Settlement.

Paul Trudelle: So with those materials, I understand preparing those materials can often be a difficult or a bit of a fine line that you have to walk down because you need to put some evidence before the court to say that the settlement is reasonable.  But you want to be careful not to tip your hand too much.  You can’t go in with an Affidavit saying wow, I can’t believe the defendant settled this on the basis that they did. It’s a great settlement because we had no case.  So you’ve got to be very careful in preparing your materials there. How do the courts deal with the Affidavit materials that you’re able to put before it?

Sean Graham: I think it’s a really tough one.  Especially, I mean, you need an Affidavit from the lawyer.  So, in essence, an Affidavit from a lawyer which does not at least imply what the legal advice was, is a useless, in my view, Affidavit.  It’s not helpful to the court. So the lawyer is put in a very difficult position because you obviously don’t want to disclose privilege or breach confidentiality, disclose privileged information or breach confidentiality.  But by the same token, you have to swear an Affidavit. So again, you’re put in a very difficult position of either just doing a sort of a pablum Affidavit with a bunch of motherhood statements which don’t really mean very much to the court, which I don’t think can have been the intention when the Rule was drafted.  Or setting out what your legal advice was and why. I think it’s a very difficult problem.

Paul Trudelle: Probably one of the best ways to address that is to either put all of that information in and ask for an order that the motion be sealed if that’s possible.  Otherwise it may be just enough for the lawyer to say that in my experience, in my considered opinion, the reason the settlement is reasonable and set out some of the basis upon which the settlement was entered into.

Sean Graham: For sure.  I just, you know, to me it’s, you wouldn’t be before court unless that was the case.  So, you know, because they wouldn’t have settled. So, I suspect that there will be some changes relatively quickly to resolve this theoretical…I view it as a bit of a deadlock.  I think it’s a great Rule because the court should be involved in these things, should be a protection to the minor. But by the same token, there needs to be some protections for the lawyer and the litigation guardian in terms of what happens if the court doesn’t approve the settlement? Then you’ve got all this material before the court in terms of the weaknesses in the minor’s case.  And that cannot have been the intent either.

Paul Trudelle: That is a difficult issue. Another difficult issue is that the lawyer normally has to put in some information with respect to his or her fees.  The settlement often calls for a payment of fees of some sort to the lawyer and that will require court approval as well. So there must be some information there with respect to the fees and the reasonableness of those.

Sean Graham: No question.  And so you’ve got the lawyer being advocate for the client in terms of pushing this settlement through.  But at the same time. lawyers want to get paid as much as any service provider.  And so you, at the same time, you’re advocating for yourself as to why your fees are valid. And the question I always have is what happens if the court agrees with the settlement but not the fees? Do you have a settlement? And if not what, what happens then?   I think that’s another tough, tough sort of nut to crack.

Paul Trudelle: Difficult issues indeed. Now if the court does approve the settlement and the funds are payable to the minor, is that the end of it? The cheque is written to the minor and he’s off to the races, or the racetrack.

Sean Graham: No, it never seems to be over. The next step then, and this sometimes can happen all at once, is a guardianship application.  And it’s most often the litigation guardian also wants to become the guardian of property of the minor and that’s a whole other proceeding. 

Paul Trudelle: And I think that’s often a bit of a shock to the parents of the minor.  The parents can’t presume and it’s not the case that they’re automatically the guardians for property of the minor. A separate application is required for the parents to be appointed as the guardian. Now that procedure, I understand, can be brought as a separate guardianship application or can possibly be brought in the context of the action before the court?

Sean Graham: Yeah.  There’s a recent decision on this actually, and it’s quite a lengthy and well considered decision by Justice Wilkins.  It’s the Marcoccia decision.  And we’ll put that in the show notes.  But Justice Wilkins goes through a lot of issues at length.  And is of the very strong view that in fact all these things should be brought at once because they’re all, all the facts obviously are related and there’s going to be a lot of duplication if you bring the motion for court approval and then the application for guardianship.  And so Justice Wilkins was of the view that it should all be done at the same time wherever possible. And, you know, to keep the legal fees down and don’t have duplication and so forth.

Paul Trudelle: I also think that the judge considering the motion to approve the settlement has all of the information needed or a lot of the information that would be considered in determining whether the guardianship plan is appropriate as well.

Sean Graham: Yeah.  And what in practical terms it does is the children’s lawyer generally is on notice of the motion to approve the settlement but is definitely on notice of the guardianship application. So if the children’s lawyer has not been brought in on the motion to approve settlement, and it’s certainly my practice to bring them in anyway, but if they’re not brought in on that, they’re going to be brought on the guardianship application. So you’ll be dealing with another party.

Paul Trudelle: We should talk a bit about that in the notice when you move to approve a settlement. The Rules don’t expressly require the children’s lawyer be put on notice.  It’s the Rule directs that the court, if it sees fit, can direct that the children’s lawyer be served. I think the best practice, however, is to serve the children’s lawyer with the materials at for instance.

Sean Graham: I think so too because the majority of the time, if you haven’t, the court is going to ask you to do it anyway.  And then you go to court twice when, you know, you might not have needed to so. I think the approach of the children’s lawyer to these things might actually be worth another podcast.

Paul Trudelle: I think so.  And I think the guardianship for property of minors merits its own podcast as well. So maybe we’ll wrap up at this point.  Just before we do, another procedure short of applying for guardianship for property of the minor is simply to have the funds paid into court.

Sean Graham: Yeah.  And that is maybe a lot more efficient.  The problem is you lose control if you’re the parent of the child.  And the child him or herself, you know, may want their parents making a lot of these decisions.  And so you may lose the sort of investment advice that you would normally get under a guardianship and so on.  But it’s definitely a quick way to do it.

Paul Trudelle: I think that’s very helpful Sean, thank you very much.

Sean Graham: Thank you Paul.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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The case of Conceicao Farms Inc. v. Zeneca Corp., recently decided by the Court of Appeal for Ontario, is a good reminder of the care and focus required during the discovery process when seeking disclosure of findings, opinions and conclusions of another party’s expert. 

In this case, the respondents had provided an expert report 8 months prior to trial. The expert was then called as a witness at trial. The appellants’ action was dismissed with costs at trial with the trial judge relying, in part, on the respondents’ expert evidence. 

When the respondents provided material to the appellants in support of their costs claim, the existence of a memorandum came to light. The memorandum, prepared several years before the trial, contained foundational information for the opinion of the respondents’ expert. The appellants then moved before the trial judge to request production of that memorandum. The trial judge dismissed the motion. 

The appellants appealed the trial judge’s decision. They relied on Rule 31.06(3) of the Rules of Civil Procedure hoping to tender the memorandum as fresh evidence on an appeal in order to argue that a decision based in part on the expert could not stand since the memorandum was wrongly withheld. 

The respondents’ Affidavit of Documents asserted privilege over all documents and memorandum prepared for the purposes of litigation. The memorandum was not produced to the appellants. 

However, the C.A. found that as the appellants knew of the expert’s final opinion months before the trial, they were entitled, at that time, to seek discovery of the foundational information for that opinion pursuant to Rule 31.06. The appellants apparently did not choose to do so. The C.A. found that there was no basis for the appellants to do so following the trial. The ability to seek discovery of foundational information for an expert opinion applies to the discovery stage of litigation which was closed. Moreover, the appellants were not entitled to disclosure at this later stage to cure their own failure to properly exercise their right to obtain this foundational information on discovery. 

Seeking the disclosure of expert evidence should be considered earlier rather than later.

Thanks for reading.

Craig

 

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Given the events of last week, it is hard not to blog on the Conrad Black verdict.  Much has been written with more to come.  In one of my spring blogs, I commented, with some admiration, on Black’s perseverance in the face of overwhelming odds and noted the importance of steadfastness in litigation.  Of course, the danger for Black, as with all other litigants, is that perseverance becomes intransigence.  According to a variety of talking heads, Black had ample opportunity to settle with the shareholders and avoid the entire mess, but refused. 

I will leave it to others to comment on the justness of the Black verdict.  However, building on yesterday’s blog, which addressed the importance of gathering and putting forward the right evidence, the Black verdict is instructive.  Black’s right-hand man, David Radler, was ultimately not believed by the jury.  Black’s defence team went to great lengths to paint the prosecution’s star witness as a blagger and a liar; they obviously had some success.

What was interesting is the fact that three “small town” newspapermen were, in fact, believed by the jury of 12 ordinary men and women.  The three claimed that they were suspicious when Black tried to inject himself through non-competition agreements into the sale of newspapers.  To the jury, their evidence rang true and was credible; Black was up to no good.

In the end, Black was convicted on the evidence of strangers or third parties to the litigation.  The three newspapermen had nothing to gain by testifying.  Their evidence, presented in a sincere and congenial way, proved to be the undoing of Black.  It is trite to say that litigation is unpredictable.  However, when witnesses who have nothing to gain give evidence, it is best to sit up and take notice.

Thanks for reading!

Justin.

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In a recent decision out of Alberta, a court denied one of the litigants leave to present viva voce or oral testimony in the context of an application to have that litigant declared incapable.

In Adria v. M. (E.) [2007] A.J. No. 291 (Q.B.) (Q.L), a father's children brought an application to have their father declared a dependent adult.  The father had previously been admitted to hospital and found incapable of making decisions regarding his personal matters.  The diagnosis had included dementia and significant impairment of judgment.  On the basis of medical opinions, the children believed that their father should permanently live in a locked supported-living facility.  Hence, the need for their application.

The father, in turn, brought an application for a declaration that he was being wrongly and unconstitutionally detained.  As part of his application, the father sought leave to give oral testimony at the hearing.  The court ultimately denied leave.

As part of its reasons, the court held that although it had discretion to allow an individual to give viva voce evidence, that discretion should be exercised sparingly.  The court found that there were no special circumstances present in favour of departing from the usual rule that evidence should be provided by way of affidavit.  Indeed, the father had filed three affidavits, in which his views, evidence and wishes were expressed.  The court found no obvious reason to supplement the father's affidavit evidence with oral testimony. 

The issue before the court was not one of credibility, as no one doubted the father's desire to be free and live in his own home.  The court held that where groundwork has been laid to question capacity, and in this case the various medical opinions provided by the children had laid that groundwork, the issue of capacity became one of expert opinion, and not credibility.

The Adria case is a good illustration of the limitations placed on litigants in presenting evidence on motions and applications.  Unlike trials, presenting oral testimony is not a right, but ultimately an exercise of judicial discretion. 

Have a great day!
Bianca La Neve

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Listen to "The Two Sides of Transferring a Cottage to your Children

Read the Transcribed Version "The Two Sides of Transferring a Cottage to your Children"

During Hull on Estates Podcast #47, Justin de Vries and Megan Connolly  focus on the case of Rose v. Rose wherein a family breakdown and the transfer of assets into a irrevocable trust leads to litigation. 

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Perhaps the most difficult issue that arises in power of attorney litigation relates to a determination of the onset of incapacity and the varying degrees of incapacity. These issues have a direct bearing on the nature of the fiduciary obligation of the attorney.

Under the Substitute Decisions Act, an attorney has a higher duty of care (a) if the grantor is incapable of managing property; or (b) if the attorney has reasonable grounds to believe that the grantor is incapable of managing property.

The reality is that there is often no clear determination made that the grantor is incapable. All too often, the Court is left trying to make that determination a considerable period of time after the fact.
When the grantor is capable to manage her property, it is only to the grantor that the attorney is accountable. Put another way, the principal provides authority to the agent to act on his behalf. It therefore follows that if the principal (grantor) was capable at all relevant times, the agent (attorney) will be well-positioned to argue that he should not now be accountable to others: If the grantor did not raise any concerns about his agents actions, they must have been made with the grantor’s consent!

The difficulty, of course lies with the question of proof. The grantor, now being incapable or deceased, is unable to provide any insight as to the nature of the authority that was given to the attorney as his agent. On the other hand, the attorney/agent is typically under an evidentiary burden of corroborating his position that the grantor had authorized his actions. This burden is enhanced when the financial decisions made were, by all appearances, imprudent or not in the apparent best interests of the grantor.

Have a great day, David

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Picking up on our discussion of issues encountered in capacity litigation, a common scenario sees the Court asked to make inquiry into the relationship between the grantor and the attorney by a more “distant” sibling or relative (either geographically or otherwise).

Procedurally, in Ontario, leave of the Court must be sought under s. 42(4) of the Substitute Decisions Act to permit the Applicant to make application for an order compelling an attorney under a Power of Attorney for Property to pass his or her accounts.

The test for leave has been characterized in the unreported case of Ali v. Fruci [2006] O.J. No. 1093 as twofold: (i) does the applicant have a genuine interest in the welfare of the grantor of the power of attorney?, and (ii) if leave were to be granted, is a court likely to order a passing of accounts?

Thus, when seeking to compel an accounting by an attorney under a Power of attorney, the first question to ask is whether the “distant” sibling is even in a position to ask that the Court make inquiry into his or her sibling’s actions. Under the Substitute Decisions Act, the Court will order an accounting by the attorney under power of attorney for property but not without carefully considering the motives of the person seeking leave of the Court.

The test for leave is inherently discretionary and, in effect, involves a morality assessment of the motives of the applicant. So, for instance, where a son of an incapable mother sought to compel an accounting by his sister (who managed her mother’s finances), the Court chose not to grant leave where the son had not visited his mother for eight years. What was startling about this decision was the fact that the attorney had transferred the grantor’s property into joint ownership with herself and then promptly sold the property. Nonetheless, while the Court acknowledged that the situation might be cause for concern, the Court was not prepared to entertain the inquiry when the applicant before it did not appear to have a genuine concern for the welfare of the grantor.

Simply put, the duty of an attorney to account would appear to only be relevant if some person has sufficient standing before the Court to seek to compel the assessment. Certainly, an alternative is for the Office of the Public Guardian and Trustee (“PGT”) to carry the ball for the distant sibling who does not gain the trust of the court. Accordingly, if the distant sibling is not perceived by the court to be operating from a moral high ground, one strategy to employ is to seek to bring the PGT onside to make the inquiry on behalf of our client. However, unless there is clear and compelling evidence of elder abuse, the PGT will be disinclined to get involved.

Have a great day, David

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In Re Nesbitt Estates, an unreported 2005 decision of the Ontario Superior Court of Justice that is presently under appeal, the actions of an attorney under power of attorney were scrutinized by the Court in an unusual fact situation.

In this case, the attorney managed the property of his elderly aunt and uncle at their request and made a series of transfers of the aunt’s bank accounts into joint bank accounts held with her husband. The evidence suggested that the aunt was capable at all relevant times although there was admittedly sketchy evidence as to whether the aunt knew and approved of each and every transaction that placed her assets into joint ownership with her husband of sixty years. What was clear was that her testamentary intention throughout the period of the transfers was to benefit her husband with her entire estate. The wrinkle was that the aunt inexplicably changed her will shortly before her death to benefit, not her husband but, rather, a family friend.

When the aunt/grantor unexpectedly died three months before her husband, the joint assets became an issue. The executor and beneficiary of the aunt’s estate (after waiting until her husband died three months later) alleged that all assets which passed to her husband by right of survivorship were, in fact, improperly transferred by the attorney and were accordingly impressed with a trust for the estate of the aunt.

At trial, the Court accepted the argument advanced by the aunt’s estate that she did not know and approve of the transactions, that the attorney had acted at his own behest, and that the joint transfers should effectively be set aside. The effect was to benefit the sole beneficiary under the aunt’s last will with the assets which would otherwise have passed by right of survivorship to her husband and his estate.

This case gives rise to some interesting issues, the foremost being to what extent an attorney acting for a grantor may be precluded from transferring assets into joint ownership. A key factor in this case was the fact that the attorney for property knew of the testamentary intentions of the grantor and surmised that the transferring of the assets into joint tenancy was consistent with those testamentary intentions. The attorney’s evidence that the joint accounts were appropriate was corroborated by the terms of the aunt’s will throughout the period that the transfers were made, together with the bank’s documentation opening the joint account which was signed by her and witnessed by a bank employee.

Perhaps the most curious aspect of this case is the fact that, had the aunt survived her husband (as was expected, he being in very ill health during the period in question), the transfer of the assets into joint ownership would have been of no consequence.

Stay tuned for the decision of the Divisional Court on appeal!

Have a great day, David

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LISTEN HERE

READ THE TRANSCRIBED PODCAST HERE

During Hull on Estate and Succession Planning Podcast #35, we discussed:

• Special needs beneficiaries;
• What the definition of a special needs beneficiary is;
• The use of trusts for special needs beneficiaries; and
• The proper planning for special needs beneficiaries and what happens to the assets and the trust when the special needs beneficiary dies.
  

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LISTEN HERE

READ THE TRANSCRIBED PODCAST

During Hull on Estates Podcast #35, we discussed the following:

• Competing beneficiaries who join forces to challenge a Will when they do not have identical interests;
• People that need to be served in a Will Challenge;
• How to decide if you need your own lawyer or if you should join forces with the same solicitor; and
• How to deal with the costs of the Will Challenge when dealing with several lawyers.
  

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CONTEMPT MOTIONS AND ESTATE LITIGATION – PART V


As I mentioned in yesterday’s blog (November 2, 2006), today’s blog will note several cases wherein contempt motions were brought in respect of passings of accounts.

In Mesesnel (Attorney of) v. Kumer, [2004] O.J.N. 1834 (Ont. S.C.J.), the Court considered a contempt motion arising from allegations that the accounts prepared by a party did not cover the entire accounting period and the accounts prepared were improper.

In this case, prior to the death of Mesesnel, Donald Steward Mills had apparently been a good friend of Mesesnel and also served as Mesesnel’s solicitor and occasional business partner since 1970 and had Power of Attorney over Mesesnel since 1978. An Order was made for the passing of Mills’ accounts. Mills provided some accounting but it was claimed that the accounting was incomplete as it only went back to a certain date (1996) and that it was not submitted in proper court form. The clarity of the Order was a concern. It read:

“4. THIS COURT ORDERS that Donald Stewart Mills provide accounts as required under section 42 of the Act and prepare accounts relating to his management of assets of Mesesnel as required under rule 74, to be provided on or before June 30, 2002 unless otherwise ordered by this court.”

It was also alleged that Mills, as a solicitor, should have known how to submit the accounts, and that since Mills and Mesesnel were business partners and Mills had Power of Attorney since the 1970’s, Mills should have accounted for the period proceeding 1996. Mills’ position was, amongst other things, that it would be a “monumental job” to reconstruct most of Mesesnel’s business for the past 30 years.

The Court held that it would be foolish for Mills to be ordered to provide the proper passing of all accounts since 1978 simply because of the multiple roles Mills held in Mesesnel’s life. The Court wrote that Mills had “no duty, at law, to account to the Kumers for all the legal work he did for Mesesnel over the years…” and further that Mills did not wilfully or deliberately violate the original Order. Perhaps equally as important, the Court stated that the parties should have not relied on their own interpretation of the Order but sought clarification if they had questions.

In Krause v. Shkopich, [1998] S.J. No. 276 (Sask Q.B.), the Court, in dismissing a motion for a contempt, that claimed a party had not prepared a complete accounting in respect of the administration of trust property found that concerns surrounding the adequacy and completeness of the accounting were better addressed through the more usual course of requiring production and inspection of documents and proceeding to examination for discovery, if necessary.

In Belanger v. McGrade Estate, (2003), 65 O.R. (3d) 829 (Ont. S.C.J.), a sole estate trustee was found in contempt for a repeated failure to pass accounts and to comply with Court Orders. So grave was the non-compliance that the estate trustee was imprisoned. The estate trustee was released from jail, however, when, after hiring new counsel, it was learned that the estate trustee’s original lawyer was the actual cause of the repeated failure to pass accounts (the lawyer had not informed the estate trustee of the multiple Orders requiring the passing of accounts). In removing the contempt Order on the estate trustee, the Court relied on R. 60.11(8) which states, “on a motion, a judge may discharge, set aside, vary or give directions in respect of an order under subrule (5) or (6) and may grant such relief and make such other order as is just.”

In Steingarten v. Steingarten Estate, [1998 Carswell Ont. 5741] (O.C.J.) affirmed (June 22, 1999), Doc. C.A. C30263 (Ont. C.A.), the Court dealt with an application for contempt arising from an Order directing the respondent to provide the accounting required by an earlier Order of the Court. Since the original Order to pass accounts, the matter had been before the Court on a number of occasions. Despite the directions of the Court, the accounts still did not technically comply with the requirements of the initial Order. With the passage of time and the manner of record keeping, the trustee could not provide an appropriate accounting, despite efforts to do so even with the assistance of a chartered accountant.

The court dismissed the application for contempt noting that the matter had “developed into a ‘serious family squabble’ and the interest of justice would not be served by finding the trustee in contempt.” The judge added in his view, contempt had not been established. There was no order as to costs.

When a party defies an Order, an aggressive position by the enforcing party may be the only way to force the other party to comply with the Order. However, as noted in yesterday’s blog, and by certain of the above-noted cases, in deciding whether to bring a contempt motion, counsel should consider where bringing such a motion at a certain time best achieves the desired end.

Have a great day.

Craig.

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In almost every case, the majority of the evidence will come from the allegedly abused child and, as such, the strength of that evidence can be problematic. In these types of situations, one must not forget the requirement of corroborative evidence pursuant to section 13 of the Estates Act R.S.O. 1990, c. E.23, which provides that:

13. In an action by or against the heirs, next-of-kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.

See also Schnurr B.A., "Estate Litigation - Requirement of Corroboration", 5 E.T.Q. 42.

Due to the evidentiary difficulties of these types of claims, one of the first steps that a claimant should consider taking is to obtain an expert's opinion.

The expert's opinion should contain evidence for the Court to consider with respect to such things as the recollections of the claimant, the details of abuse over the years and the results of both the mental and physical ramifications of that abuse.

In support of that opinion, corroborative evidence should be obtained from as many medical institutions as possible. Evidence from the medical records of the child would presumably refer to long-term psychiatric care and, in particular, some reference to the abuse over the years.

To further assist, every effort should be made to obtain supporting corroborative evidence from family, friends and neighbours. In my view, anyone who has even a brief recollection of instances, such as the police showing up at the house for no apparent reason, episodes of yelling and screaming, or witnessing the actual physical attacks, can make or break a case.

 It seems to me that, given the frailties of the evidence that must be led, one really must obtain a comprehensive and supportive expert's opinion, at a minimum.

Another precautionary consideration that should be reviewed with any child who is considering pursuing a claim for breach of fiduciary duty of parental obligations, is the nature of the evidence that must be led. In order to succeed, the child must be prepared to give full and frank disclosure of his/her physical and mental condition - and in many cases, this won't be easy.

All the best, Ian and Suzana.